Cabinet approval has been given for the Government to enter into a $ 90.5 million loan agreement with China’s EXIM Bank for funding consultancy services, including design renew and construction supervision of the $ 1.7 billion Southern Expressway extension which is also being funded by the same entity.

Under a Cabinet paper submitted by Finance Minister Ravi Karunanayake, the Government will enter into a framework agreement with the Government of China and into a loan agreement with the China Exim Bank for funding “consultancy services for design review and construction supervision of civil works of this project”.

The Sri Lankan Government has already entered into four agreements with China Exim Bank for funding four civil work contracts for the Southern Expressway.

The stretch from Matara-Hambantota was ceremoniously flagged off by President Maithripala Sirisena in July 2015 and China EXIM Bank had already extended a $ 1.7 billion preferential loan with an interest rate of only 2% in 2014 under the previous Government. Repayment is spread over 20 years with a five-year grace period as per the agreement signed in 2014.